Chinese Oil Demand Slipping?
May 30, 2024
The average estimates for the DOE inventory report this morning from the Bloomberg survey are for crude oil supplies to decrease by 1.185 million barrels, gasoline supplies down 1.122 million and distillates down 137,000 barrels.
The API estimates reported last night showed crude oil stocks down 6.490 million barrels, gasoline supplies down 452,000 barrels, and distillates supplies up 2.045 million barrels.
The market tried to run higher but ran out of juice and settled lower on the day. Trading volume was light, so caution is advised not to read too much into yesterday’s trading. At this point, you have to say the market continues to be stuck in a trading range, and either the bulls or the bears need to get to work pushing prices out of the recent ranges.
Bloomberg reports that while OPEC+ prepares to review global oil markets on Sunday, lower Chinese oil demand could impact the producer groups’ strategy to shore up prices. OPEC+, which has cut oil supplies to stave off a surplus and support prices, is expected to continue the measures into the second half of the year. However, a decline in China’s imports could derail its efforts. Chinese refiners are cutting process rates amid declining factory strength and a housing crash cut demand for plastics and fuels used in construction. China’s darkening outlook adds downward pressure to a global market awash with plentiful supplies from the US and elsewhere.